1. Buying a lot of equity
On December 17, China Resources Double-Crane issued an announcement that according to the company’s overall strategic plan, in order to further enrich the products in the field of cardiovascular and cerebrovascular anticoagulation and obtain a technical platform in the field of anticoagulation, the company used its own funds to acquire 38.75% of Dongying Tiandong Pharmaceutical Co., Ltd. The purchase price of the equity is 341 million yuan. The management of the company is responsible for organizing and implementing the relevant work of this equity acquisition project.
According to the data, Dongying Tiandong Pharmaceutical Co., Ltd. was established in 1992. It is a pharmaceutical company that specializes in R&D, production and sales of heparin and low molecular weight heparin series anticoagulant drugs. The raw materials have passed the on-site audit of the EU EDQM and the US FDA, and the products are sold to dozens of countries and regions in Europe, America, etc., in addition to domestic sales.
The company has a registered capital of 407 million yuan and is a high-tech enterprise. Its main products are heparin sodium raw materials, enoxaparin sodium raw materials, and enoxaparin sodium injections. Among them, heparin is mainly used clinically for thromboembolic diseases, myocardial infarction, cardiovascular surgery, cardiac catheterization, extracorporeal circulation, hemodialysis, etc.
It is understood that due to the good anticoagulant effect of heparin, it has become one of the common clinical anticoagulant drugs. Heparin products mainly include crude heparin, heparin raw materials, standard heparin preparations, and low molecular weight heparin preparations. Compared with overseas suppliers of heparin raw materials, my country's low cost of ownership, adequate supply of heparin raw materials, innate favorable conditions and competitive advantages.
Overall, the market for heparin preparations has shown an upward trend in recent years. In terms of the market, low-molecular-weight heparin preparations have wide applicability and high safety, and currently still occupy the main sales position in the heparin preparation market. In 2019, low-molecular-weight heparin preparations accounted for 85.91% of the total sales of heparin preparations.
Some research institutes stated in the research report: From the perspective of my country's heparin preparation market, foreign-funded enterprises have gradually reduced their market share, and domestic substitution is a long-term trend, which also shows the market prospects of Dongying Tiandong Pharmaceutical to a certain extent.
2, raw material preparation integration
According to the data, the cooperation between China Resources Double Crane and Dongying Tiandong Pharmaceutical is intended to create a high-end complex and difficult-to-biomimetic drug development platform, and to extend the industrial chain to multiple formulations while making heparin-specific raw materials. To achieve the integration of raw materials + preparations, the variety of preparations will be used as an increment to expand the business space in the future.
China Resources Double-Crane told the Securities Times: “The acquisition of 38.75% of Tiandong Pharmaceutical’s equity will provide support for Double-Crane’s extensional development. China Resources Double Crane strategic business area."
To a certain extent, the normalization of volume procurement across the country has changed the ecology of the pharmaceutical industry. The industry agrees that enterprises with integrated raw materials and preparations will have more advantages in market competition. While maintaining part of the advantages of APIs, companies can expand into the field of downstream preparations and take advantage of the cost advantage to seize the preparation market by taking advantage of the domestic centralized procurement. The performance is mainly driven by new production capacity, new product launches and preparations winning bids.
And China Resources Double Crane also stated in the semi-annual report that its chronic disease products are the key focus area of mass procurement, and the performance is under pressure. The company actively embraces mass procurement and aims at the organizational capabilities that different types of products need to match after mass procurement. Start the marketing model transformation.
Among them: For products that are not affected by mass procurement, promote product sales through key measures such as branding, attacking the medical consortium/medical community catalog, and grasping the county-level market as a leader; for products that have been affected by mass procurement , Actively expand out-of-standard markets such as retail terminals, and try to slow down the rate of product decline; for products that will soon be included in mass procurement, actively respond and make preparations in advance.
Perhaps the heavy purchase of Dongying Tiandong Pharmaceutical’s equity is an important step for China Resources Shuanghe to respond.
3, China Resources Double Crane, performance under pressure
On August 24, 2020, China Resources Double Crane released a semi-annual report. The report showed that in the first half of 2020, the company achieved a revenue of 4.096 billion yuan from its main business, a year-on-year decrease of 14%, and a net profit (attributable to the parent company) was 554 million yuan, a year-on-year decrease. A drop of 13%.
Among them, the chronic disease business revenue decreased by 4% year-on-year. Among them, the blood pressure field decreased by 15% due to the volume purchase, the sugar lowering field increased by 1%, and the lipid-lowering field increased by 22%. Key antihypertensive products Suiyue, Fu Suiyue and Nifedipine sustained-release tablets showed double-digit growth; the hypoglycemic drug Tangshiping increased by 4% year-on-year; the cerebrovascular drug Nobel (Citicoline Sodium Tablets) continued to maintain Rapid growth, sales revenue growth rate 20%.
In addition, due to the impact of the epidemic, the performance of the infusion business in the first half of the year fell severely, and revenue fell by 25% year-on-year. Among them, the sales of basic infusion solutions fell by 27%, which was basically similar to the performance of the industry, with a stable market share and a stable packaging material structure.
There have been opinions in the industry that the growth rate of China Resources Shuanghe's specialty business is the highest, and the infusion business has been in trouble. The main reason is that the sector is affected by policies such as infusion restriction, auxiliary medicine restriction, medical insurance control fees, and second bargaining. In addition, most of its infusion business also belongs to large-scale infusion, with relatively old varieties, low technical content, low profits, and weak bargaining power in market competition.
Cyberlan looked for the keyword "anticoagulation" in its semi-annual report, but failed to find the relevant expression. This may mean that China Resources Double Crane's acquisition of Dongying Tiandong Pharmaceutical is a relatively large business breakthrough.
Source: Chemnet
